News - December 7, 2018 - by Ray Hagar
The trade war between the U.S. and China is a major concern for Las Vegas gaming companies with properties in Macau, said Pat Mulroy, board member of Wynn Resorts.
Mulroy, a senor fellow at Brooking Mountain West, told Nevada Newsmakers' host Sam Shad that the trade war is especially worrisome since all three Las Vegas gaming companies in Macau are up for license renewal soon by the Chinese authorities.
"There is concern over the trade war," she said. "Obviously, all of us from Las Vegas who have licenses to own properties and have gaming licenses in Macau, those licenses were always time-limited.
"And those licenses are coming up and I think there is a concern that we have pushed the Chinese so far that this snowball of retaliation can come back to haunt all of us," she added.
The Wynn Resorts license to operate in Macau is up for renewal in 2022. The Las Vegas Sands license expires the same year while MGM Resorts' license is up in 2020, according to the Las Vegas Review Journal. All three Las Vegas companies are facing license renewals in Macau for the first time.
Wynn Resorts and the Sands generate more than half of their earnings from Macau.
"I just think that we need to be very respectful and understand that even though Macau used to be a Portuguese colony, it is now a part of China and the Chinese government has an enormous influence over who gets licenses and how the development in Macau proceeds," Mulroy said.
Mulroy acknowledged China's role in the trade war, too.
"Now there are probably nuances of this where the Chinese have gone too far, and I think that is a rational conversation to have," she said. "But I've never been a big fan of trade wars in any venue."
President Trump has said he has struck a deal with the Chinese for a 90-day pause in the trade war. China released a statement this week, only saying it hoped to reach a permanent deal within “90 days in accordance with a clear timetable and road map.”
Trump had imposed tariffs on $250 billion worth of goods, ranging for 10 to 25 percent, before he announced the truce.
The mixed signals of the statements from Trump and China caused U.S. markets to drop earlier this week. Also, international political experts said Chinese leaders are outraged over the recent arrest of a top executive at a leading Chinese tech company by U.S. agents as a security threat.
Despite the concerns, Wynn Resorts still has big plans to expand in Macau, Mulroy said.
"We are going to be expanding and revitalizing and adding to our attractions at Wynn Palace," she said. "It is the most spectacular hotel, I would say, in all of Asia. So I am a big fan of Macau. And the market is, like, limitless."
Yet respect for the Chinese is something Macau operators must never forget, Mulroy said.
"We need to exhibit a very differential and respectful manner with the Chinese government and the Macanese government. It is a different culture from the one we are used to. Plus, it is a matter of adapting. But those (Wynn) team members over in Macau understand that. They have made that adjustment and I think you re going to see great things happening in Macau over the next five or six years."